Chris Volk, president and CEO of STORE Capital Corp. (NYSE: STOR), joined REIT.com for a CEO Spotlight video interview during REITWise 2015: NAREIT’s Law, Accounting and Finance Conference held in Phoenix.
STORE is an acronym for single-tenant operational real estate, which is the company’s target market. The Scottsdale, Ariz.-based company held an initial public offering (IPO) in November 2014.
Volk explained that the company, which was formed in May 2011, initially raised capital through prominent institutional investors. A round of capital-raising took place in 2013, but those funds had been almost fully deployed by mid-2014. That necessitated a new inflow of capital.
“Going public was our way of doing a third round of capital,” Volk said.
Volk, who has been involved with two other IPOs prior to the STORE Capital IPO, noted that the bar for taking a company public “gets harder over time.” He stressed that companies have to fill a niche in order to succeed.
STORE Capital’s niche is investing in profit center real estate, or properties that generate a profit at the asset level, such as chain restaurants, fitness centers, and early childhood education centers. Volk noted that STORE Capital gets unit-level profit and loss statements on about 96 percent of its properties, which are all leased on a long-term net basis with an average lease term of 15 years.
Meanwhile, Volk said he sees potential for the net lease sector to continue to expand.
“We think the ability of the net lease REIT sector as a whole to grow and become one of the largest REIT sectors out there, and the fastest growing REIT sector for some time to come, is very possible,” Volk said.